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Board hears plan for short‑term bridge loan to cover SRF disbursement timing
Summary
Staff described a revolving interfund loan from the general fund to the water fund to cover short‑term cash shortfalls while SRF reimbursements are pending. Staff proposed a six‑month no‑interest grace period for each draw and said the formal agreement will return in November for approval.
Finance staff told the board they expect an end‑of‑year cash shortfall in the water fund due to timing of SRF disbursements and proposed a revolving interfund loan from the general fund as a bridge.
Brent Balderson summarized the proposed interest mechanics: "Interest on each draw from the revolving loan shall not accrue for a period of 6 months and 1 day from the date of such draw. Thereafter, interest shall accrue on outstanding principal balance of each draw at the agreed upon interest rate until such draw is repaid in full." Staff explained the six‑month no‑interest period would avoid burdening ratepayers for short‑term cash needs and that SRF reimbursements are expected in the months after draws. Board members supported the administrative simplicity of a six‑month grace period and asked staff to return with the formal loan agreement for board approval in November.
Why it matters: Short‑term bridge financing affects internal cash‑management and requires clear tracking and disclosure to the finance committee and public. Staff said the agreement will be fully disclosed to the finance committee and recorded if executed.
